WLK

Westlake is a commodity-chemicals and building-products maker mired in a severe cyclical downturn. FY2025 was an outright loss year: revenue fell 8.0% to $11.2B, gross margin collapsed to 7.3% (gross profit -58.5%), operating income swung to -$1.58B, and the company reported a net loss of $1.51B (-$11.70 diluted EPS) versus $602M of profit in FY2024. The five-year history shows the classic chemicals cycle — peak earnings of $2.25B in FY2022 collapsing to losses as pricing and volumes deteriorated. ROE of -17.2% reflects the depth of the trough.

The key question for a cyclical is survivability, and here the answer is reassuring: Westlake retains $2.72B of cash, current assets ($6.22B) more than double current liabilities ($2.77B), and liabilities/equity is a moderate 1.21x with $8.79B of equity still intact. Even in a loss year, operating cash flow stayed positive at $465M, and the company continued its dividend ($272M, +3.0%) and modest buybacks. Long-term debt rose 11.7% to $5.09B and the current portion jumped sharply, so leverage is creeping up — a point to watch — but the balance sheet can clearly weather the cycle.